10 Footwear Apparel Stocks Affected By China Tariffs

7. Under Armour Inc. (NYSE:UAA)

Under Armour Inc. is a developer, marketer, and distributor of athletic performance footwear, accessories, and apparel for youth, men, and women. It supplies its products through independent distributors, wholesale channels, and e-commerce websites.  The company sources 14% of its products from China.

UAA has just announced its quarterly earnings report exceeding analyst expectations. It also raised its full-year guidance amid improving demand in both Asia and North America.

One of the earnings highlights was the company’s 2.4% improvement in gross margins, which are now at 47.5%. While foreign exchange impact has helped improve these margins, management’s decision to rein in promotional activities has helped save costs. Lower freight costs also contributed to the gross margins during the quarter.

UAA may continue to receive a mixed response from investors as the company is in the midst of a transformation, switching to a category-focused operation which the management thinks will enhance its execution in some of the key categories the company operates in. Here’s what the CEO had to say about the transformation plans:

As we sharpen our focus on strengthening the Under Armour brand, our updated product strategy and enhanced marketplace discipline combined with the shift to a category-led operating model are driving our transformation.